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Target ROI computation

Current Target ROI Computation Framework & Scope of improvement:

Target ROI = sscat_roi_wt_avg * obyc_multiplier * (Demand multiplier) * new_catalog_multiplier * 0.60

Parameter

Significance of the parameter

Current State

Current State: Look Back Period

Problem in current state

Proposed solution

Additional Info

Rebalancing multiplier

This parameter was added to balance the CPC on the platform, when we made tactical changes to the target ROI - while migrating from 7 day lookback period on sscat ROi to 30 day lookback period - this multiplier was introduced

0.6

Fixed

This parameters ideally should not exist - this was introduced to mitigate the revenue loss that would occur when altering the lookback period of target ROI

Remove the artificial multiplier after making all the other changes in the framework

Anchor Target ROI for a given SSCAT

Anchor ROI for a sscat - to decide the mean ROI to be targeted for all the catalogs belonging to the sscat

Average ROI of all the catalogs belonging to the sscat

Last 30 days excluding yesterday

The anchor target ROI does not capture the most recent trends in the deliverable ROI for the given sscat. Shortening the lookback period will also result in very erratic movements in the target ROI and hence CPC of the platform

- Use a lookback period of 7 days to arrive at anchor ROI value for the sscat - The deviations in target ROI from the previous day's value should be governed by an upper and lower thresholds - The upper thresholds will be defined as x% of the max value in the last 30 days , and the lower threshold will be the x% of the min value in the last 30 days - Any deviations in the ROI beyond the upper and lower thresholds will be capped, to prevent erratic values in target ROI

Outlier Capping on Anchor ROI

Outlier capping of the sscat level ROI to minimise fluctuations in the ROI values DoD

Capping the ROI of the sscat to a minimum or maximum value, from a legacy model (MERCURY.dynamic_bidding_sscat_min_max_roi) - needs deepdive to understand the logics used for min or max

Last 30 days excluding yesterday (from above table)

Blackbox outlier computations due to usage of legacy models

The thresholds in the above step will be sufficient

Catalog Goodness Multiplier

To alter the target ROI based on the goodness of the catalog within the SSCAT

- Create catalogs into deciles based on ObyC within each of the sscat - All catalogs in a given decile, will have the same multiplier - Good decile catalogs will target a higher ROI, and poor decile catalogs will target a lower ROI

Last 7 days deciles for each sscat, based on Ads ObyC

- Captures only the ObyC goodness of the catalogs, and does not account for the CTR in the conversion - The catalog goodness should be determined based on the both CTR and ObyC

- Add another multiplier to the equation that is based on the CTR of the catalog - Create deciles of CTR within the sscat, and add mutliplier factors to each decile - Higher the CTR, higher the target ROI, and hence lower CPC

Demand multiplier

To account for the target ROI based on the demand - supply scenario

- Every sscat is classified into buckets based on BU% and Ad view% - Low BU% catalogs gets a lower multiplier on target ROI to increase the CPC and hence increase the BU% and vice versa - We use ad view% as a proxy for D/S multipliers - higher Ad view% sscats (high demand sscats) get a lower target ROI and vice versa

Last 3 days

Ad view% is used as the proxy for understanding the D/S scenario - this is biased since the ad view% does not capture the right quality of demand

- We will need to incorporate multipliers that is based on the ECP of the sscat - The matrix should be reworked to capture ECP x BU% - to arrive at the right target ROI computations - The lookback period should be fixed to the same time period as that of anchor target ROI computation - The ECP buckets should be defined based on the absolute value of ECP of the sscat, and not based on the relative values of ECP on the platform

Current State:

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New Catalog Multiplier

Since the new catalogs do not have enough views and conversion data points on the platform, to provide better visibility for the new catalogs, we target a lesser ROI (and hence higher CPC) for all catalogs with less than "x" views on the platform

Fetches the mutiplier for new catalogs from the gold.ads_supply_sbid_catalog_multiplier table. For all the catalogs that do not meet a 'y' views on the platform, we give an additional multiplier to reduce the target ROI of the catalogs - thereby increasing the CPC to provide more ads visibility for new catalogs

Last 100 days

Blackbox multiplier computations due to usage of legacy models

- TBD

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